P Chidambaram has questioned the CSO's growth projection of 5 per cent for the Indian economy 2012-13.

NEW DELHI: While P Chidambaram has questioned the CSO's growth projection of 5 per cent for the Indian economy 2012-13, an official inquiry into India's notoriously unreliable economic indicators like the index of industrial production (IIP) and foreign trade figures has blamed 'hopelessly inadequate' error detection systems and multiple counting of exports for last year's big data bloopers.

In 2011-12, the government corrected its export numbers by $8.8 billion for April-October 2011. This was followed by a significant correction in the IIP growth for January 2012, which was revised from 6.8 per cent to 1.1 per cent due to a major revision in sugar output numbers.

Following the inquiry, the government has corrected the lacunae in its trade data calculations and appointed a high-powered committee under Planning Commission member Saumitra Choudhary to recommend a holistic overhaul of the IIP data series.

The panel is expected to submit its report this month and is likely to propose assigning seasonal weightages to IIP and foreign trade trends constitute two key inputs for the economic growth forecasts conjured up by India's statistical machinery, which are now being countered by the finance ministry.

Revenue and expenditure data from the Controller General of Accounts and advance estimates of agricultural output are the other two factors considered by the statistical office for its estimates.

Alarmed by the wide corrections in the data, the Parliamentary standing committee on finance had asked the government to conduct an inquiry into the reasons behind the errors. Last May, the National Statistical Commission (NSC) had roped in former RBI executive director RB Barman to conduct a one-man inquiry.

Barman blamed the glaring error in the IIP of January 2012 on the system's failure to detect 'impossible' sugar output numbers submitted for the index. For exports data, it found that the numbers went out of whack due to multiple counting of transactions.

'Wrong reporting of sugar production for January 2012 of 134.08 lakh tonnes, which was corrected to 58.09 lakh tonnes at the time of the first revision' led to the IIP correction,' Barman noted in his report.

"To correct such errors in seasonal products like sugar and tea that have a significant weightage in the IIP, we are considering assigning them seasonal weightages. This will also help us deal with anomalies created when a tea company reports uniform monthly output though the tea estate doesn't produce the beverage every month," said a senior government statistician aware of the deliberations of the Choudhary committee.